Use an RA to fund a TFSA
It's like free money. Use your RA to reduce the tax you pay today, then put your potential refund into a TFSA where it can grow tax-free for life.
Make your tax benefit work twice
Here is the idea: contribute to an RA, potentially reduce your tax bill, then use your tax refund to fund your TFSA. Your RA helps you build retirement savings. Your TFSA gives you tax-free growth and tax-free withdrawals. Together, they can help you keep more of your money working for your future.
It is not technically free money, but it can feel like a smart way to make your tax benefit work twice.
Could your tax refund pay for your TFSA?
Use the calculator to estimate how an RA contribution could affect your tax position, and how that potential refund could be redirected into your TFSA. Instead of letting your refund disappear into everyday spending, you can turn it into a long-term investment boost.
Contribute to your RA
Lower your taxable income for the year.
Get a SARS refund
Your contribution could come back to you as a tax refund.
Reinvest in your TFSA
Put the refund to work, growing tax-free for life.
Turn your tax refund into a tax-free investment
Contribute to a retirement annuity, lower your taxable income, and you could receive a refund from SARS. Use that refund to fund your tax-free savings account, and your tax benefit works twice.
Enter your details to see your estimated refund, how much of your R 46,000 annual TFSA allowance it could cover, and what to contribute to fully fund it.
Your age sets the SARS tax rebates we use to work out your refund.
Why open an RA when you already have a work provident fund?
Having a provident fund through work is a great start, but it does not always mean you are saving enough for the retirement you want. Provident funds often don't quite reach the percentage you should be saving.
An RA gives you an alternate investment vehicle which allows you to diversify your portfolio — and top up towards the retirement you actually want.
Are you saving as much as you need to be?
As a rough guide, your total retirement contributions — across your provident fund, RA and pension — should sit somewhere between 15% and 20%+ of your gross income, depending on when you start and the retirement you're aiming for.
The later you start, the more you need to put away:
- In your 30saround 15%
- In your 40saround 20%
- In your 50s25%+
Rough guides only — the right number depends on your income, existing savings and the retirement you're aiming for.
Using an RA to fund your kids' TFSA
The RA into TFSA strategy can also be used to help your children build long-term wealth. You contribute to your RA, and if you receive a tax refund, you can use some or all of it to contribute to your child's TFSA.
Because TFSA growth and withdrawals are tax-free, time can become one of the biggest advantages. A small amount invested early can have decades to grow — helping with future education costs, a first home deposit, or simply a stronger financial start.
Just remember that TFSA contribution limits still apply, even when the account is in your child's name.
The numbers can be powerful
Imagine opening a TFSA for your child and maxing it out from birth — R46,000 a year until you reach the R500,000 lifetime limit. Left to grow tax-free, those contributions could become:
≈ R1.9 million
by age 30
A deposit on a first home, or a serious head start in life.
≈ R9.7 million
by age 60
A serious boost towards their retirement, without them saving a cent themselves.
Illustrative figures in today's money, assuming a 5.5% return a year after fees and inflation, with contributions stopping once the R500,000 lifetime limit is reached. Actual outcomes will vary.
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